Written by Anthony Trotter
The role of the accountant in Japan today is somewhat different from other industrialized countries. Japanese accountants are very involved with the motivation of employees and the fueling of daily operations in the companies they work for. Japanese management accounting systems are designed to push for product and process innovation.
Long Term Strategies Reinforced by Accounting Management
Accounting management practices are designed in accordance with the goals and strategies of senior management to provide employees with the motivation and vision needed to succeed. The accounting role in Japanese management is more about providing influence than providing information. Yes Management Accountants in Japanese companies do provide information such as costs, expenses, budget variances, ROI and profits. However these are framed in such a way as to inspire and influence cost reduction programs and continual improvement processes on the manufacturing floor.
For the Japanese it is more important for the management accounting system to be inspirational in respect to long term strategies and goals than it is to have an accounting system that provides specific production costs. Pushing the company toward future goals is more important than providing information on where the company is right at this moment.
Most western accounting systems are concerned with where the company is at during the present moment, how much does it cost to produce this product, what do we sell it for and what is our profit margin? Japanese accounting management systems are more about how can we improve the process to make a better product for the future, a product designed to meet what the projected sale price will be.
This accounting system will come up with the price of the product that will enable it to meet with market success, then all the manufacturing systems and costs are designed to make a product that meets that market price. A good example of this is when car companies such as Toyota and affiliate Daihatsu start new car products with Product Managers submitting to senior managers the specifications and features they want the new car to have. Then the accounting management system provides a view of the price they believe the market will bear for this type of car. Western systems would start with what it cost to build the car, not what they want to sell it for. Everyone in the plant will then work toward keeping costs in line with what will make their market price profitable for them.
Corporate Finance Accounting
This arm of accounting in Japan is much like it is elsewhere. This accounting function is the manager of the company’s money – where does it come from, where is it at any moment in time, where should it go – spending – in the future to get the best return on investment.
There is a concentration on producing the financial reports needed to spur on profitability while also reporting on stability, solvency and liquidity. The goal is to provide the information and inspiration for cost cuts, continual improvement processes and motivating teams and team leaders. Many leaders of Japanese companies come from the realms of Japanese Corporate Accounting.
Career Tracks and Educational Institutions
The career track for accountants in both management and financial accounting can include anything from an Internal Auditor all the way up to CFO. It is even possible for CEO’s to come from an accounting background. Other career possibilities include Treasurer, Controller, Tax Manager, Accounting Manager, Tax Manager and FP&A Manager. The more a company is pushing their accounting toward being a tool for meeting strategic goals, the more career opportunities there are open for that accountant.
There are about 780 universities in Japan and 80% of them are private and only 20% are public. Some of the best educational institution in Japan offering a great education in this field include The University of Tokyo. The University of Tokyo is ranked 42nd in the world in accounting programs. Keio University is ranked in the top 150. Hitotsubashi University is in the top 200.